Central banks are tilting hawkish as a Middle East energy shock keeps inflation sticky, according to this week's published research roundup.
One major central bank hiked 25bp to 2.5% — its first increase since July 2023 — flagging that energy costs could bleed into broader prices and leaving the door open to another move. The Fed held at 3.75–4% on a 10-2 vote, with two governors dissenting in favor of a hike; officials described activity as expanding at a strong pace while calling inflation elevated. Researchers tracking India note the RBI hiked 25bp to 5.50% and signaled the next move is a hike or a pause, nothing lower. In Australia, Governor Bullock warned inflation will likely run hotter than the August base case and that subdued demand needs to persist. A Swedish policymaker argued recent upside inflation risks warrant slightly faster normalization. In the UK, Chancellor John Healey reaffirmed the 2% CPI target.
Published forecasts cited this week see CPI above 3% through much of 2027 in one major economy, with growth slowing below 1% late next year as new US tariffs bite.
By the numbers:
• Policy rates: Fed 3.75–4.00%, ECB 2.50%, BoE 3.75%, BoJ 1.25%.
• Next decisions: ECB 29 Oct 2026 (34 of 34 research houses expect a hold); BoJ 30 Oct 2026 (28 of 28 research houses expect a hold); BoE 5 Nov 2026 (16 of 18 research houses expect a hike).
Charts: finchiefs.com/data/policy-rates